[Transparency] The Open Tax Court

Date 2014-06-11 Category Others Updater scaadmin
Last Update


The ‘Open Tax Court’ was proposed by Yoo Sang-ho, head of the department of the tax system, on February 28, 2008. It came as part of the efforts to transform the examination system of tax-related petitions by taking into account the viewpoints of citizens.

Appointing a ‘special tax advocate’ to act as a defendant of petitioners

On March 26, 2008, a ‘special tax advocate’ was appointed to work for the ‘Open Tax Court’. The city also held sessions to educate district government employees in order to promote understanding of the program among the relevant government officials.

Formation of a task force and achievements of the Open Tax Court
On April 24, the same year, the city government integrated the House Evaluation Team and the Building Evaluation Team in the Tax Systems Department into the Real Estate Tax Base Team. Instead, the Examination and Objection Team II was launched to take care of the work related to the ‘Open Tax Court’. The team was later renamed the Tax Advocate Team.

The first ‘Open Tax Court’ was held on April 28, 2008. Backed by the positive response of citizens, the court has held a total of 32 hearings to date (November 2010). As a result of court rulings, 1,087 million won of falsely imposed taxes have been returned to citizens.

Furthermore, not only the petitioner but also general citizens, such as NGO members, students and government officials, have been allowed to participate. To date, about 3,200 people have attended. This system has contributed to restoring the credibility of the taxation system. Seoul ranked first among the 16 cities and provinces of Korea in the 2010 transparency evaluation survey conducted by the Anti-Corruption and Civil Rights Commission.


In order to reduce the distrust and dissatisfaction of citizens regarding local taxes, as a result of the closed examination process, and to increase transparency in city administration, the Seoul Metropolitan Government has opened to the public the examination process of protests related to local taxes since April 2008. This has enabled the petitioner to participate in the deliberation process and give a personal statement. Moreover, an official in the tax division of the city, with the requisite expertise pertaining to the issue, is given the role of defending the citizen, thus resulting in the development of a more transparent tax administration system. This new initiative was named the ‘Open Tax Court’.

By making the examination process of local tax objections open to the public, while also providing the petitioner with the opportunity to participate and give a personal statement, the city has tried to ensure maximum transparency in the provision of remedies to citizens.

Furthermore, in order to attain objectivity and credibility in an examination, the Local Tax Examination Committee, whose role is to make the final decision regarding objections, was made up of lawyers, accountants and tax accountants and an incumbent judge was made to head the committee to lead the objection examination process.

The government official who is responsible for the local tax levy attends the session in person to explain and justify the reason for the taxation before an audience, which includes general citizens. By having a member of the city’s tax department (special tax advocate) speak in defense of the petitioner, district government officials have become more cautious when imposing local taxes. These measures have resulted in a 24.8% decrease in improperly imposed taxes in two years and seven months. The satisfaction level of petitioners rose to 96.8 points out of 100. These figures suggest that people are highly satisfied with the Open Tax Court system.

The ‘Open Tax Court’ is not aimed at pursuing remedies after taxes have been levied but ultimately in eliminating improperly imposed taxes. Therefore, it is an example of institutional innovation to secure the preciseness, fairness and credibility of local tax administration. Through an open system that promotes public participation and the introduction of a defendant, the Open Tax Court has been cited as a model case of good governance by local governments.

Background and Goal

Closed documentary examination in the provision of remedies to citizens

The current local tax law states that when a citizen files an appeal, such as an examination or objection, regarding local taxes, the Local Tax Examination Committee should judge each case by a documentary examination and the process should not be open to the public. Accordingly, it was not possible for a petitioner to verify whether or not the petition or the related facts had been correctly reviewed by the deliberation committee. The committee simply served a written notification of their decision after it had made a ruling.

Increased complaints regarding the examination of local taxes due to a lack of objectivity and credibility

This closed, documentary examination system also applies to some developed countries, such as Germany and Japan. The government-oriented examination system does not allow the petitioner,
or the general public,to attend the relevant hearing and, therefore, its ruling often lacks objectivity and credibility.This has resulted in increased distrust of citizens towards taxation.

Public distrust and dissatisfaction was clearly witnessed in a transparency evaluation survey conducted from May 22 to July 31, 2007, by the Seoul Metropolitan Government. 12,545 citizens were involved with regards to city administration in such fields as fire, hygiene, housing, architecture, local taxes, transportation administration, construction, the environment, welfare support and parks. Local taxes scored the lowest in a similar survey conducted by the Anti-Corruption and Civil Rights Commission, in 2007, to measure people’s perceptions of local governments’ transparency levels: Seoul ranked sixth among the 16 cities and provinces in Korea.


Trial Strategy

The plan for the ‘Open Tax Court’ was formally adopted as a city initiative as part of the developmental plan for the ‘Local Tax Judiciary System for Citizens’ on April 15, 2008. It was implemented based on four strategies to protect the rights of citizens and restore the credibility of taxation in the eyes of the public.

First, by allowing a petitioner to directly participate and put forward their statement during the local tax objection process, the Seoul Metropolitan Government has secured transparency in the examination process, fairness in ruling and, therefore, completely eliminated public distrust of tax imposition.

Second, by making the relevant tax officer attend the session in person to state the opinion of the taxation office, and to rectify any mistakes, the city government wanted to completely eliminate falsely imposed taxes.

Third, by appointing a Seoul City tax officer, with expertise in tax administration, as a ‘special tax advocate’ on behalf of a citizen, the city has supported the financially-challenged citizens in their efforts to pursue remedies.

Fourth, by allowing the general public to attend the deliberation, the city has provided citizens with chances to learn about tax, which has contributed to heightening their understanding of taxation policies.


Obstacles And Overcome Method on Difficulties deriving from objections within the organization

Even in such developed countries as Germany and Japan, a closed, documentary examination system is in practice, which does not allow the general public to attend hearings. This system was also adopted in Korea regarding citizen appeals against falsely imposed taxes. The planto change the system faced strong opposition from within. Opponents said the city government would not gain anything whether it wonor lost, if a city employee were to stand in defense of a citizen in an open session. They also said the proposed ‘Open Tax Court’ would result in an even greater workload to city employees and the practice of a city official defending a civilian was not stipulated in the law. The officials of district governments responsible for tax imposition and, therefore, who would have to testify before petitioners also showed strong discontent.

Resolving conflicts through persuasion and education

In order to overcome the prevailing internal discontent, a sense of mutual understanding amongst staff members, regarding the ‘Open Tax Court System’, had to be established. The city government tried to persuade the opponents to the system by holding numerous sessions to introduce the new system. While repeatedly stressing the necessity of restoring the credibility of the taxation system, it also explained to them that even though the system was not stipulated in the law it did not violate it because the measure was beneficial to citizens. Thanks to these efforts, the city government succeeded in drawing support from its employees. At present, the employees of district governments are more favorable to the system in that it provides them with the chance to openly verify the validity of their decision on tax imposition.


Used Resources

 The ‘Open Tax Court’ does not require an additional budget. External committee members, such as lawyers and tax accountants, were paid fees when they attended the closed, documentary examinations in the past. In making the examination sessions open to the public, no additional fees were needed.  Furthermore, as the existing taxation staff members oversee the ‘Open Tax Court’, there was no need to hire additional personnel. Still, none of this would have been possible without the taxation staff who, despite the increased workload, accepted the system to better protect the rights of citizens.


Elimination of factors leading to corruption with a transparent and open tax administration system

By changing the closed examination process to one that is transparent and open, the validity of tax imposition can be openly contested in public. The relevant tax officer is allowed to rectify any falsely imposed taxes, and this system has led to the elimination of factors that once led to corruption.As a result, Seoul ranked first in a 2010 transparency evaluation survey of 16 cities and provinces in Korea that was conducted by the Anti-Corruption and Civil Rights Commission.

Supporting citizens with expertise

In order to appeal against a tax bill, ordinary people need advice from an expert, such as a tax accountant or a lawyer. But the cost of hiring such an expert would be a barrier to low-income citizens; thus, the Seoul Metropolitan Government had one of its employees in its tax department act as a pro bono ‘special tax advocate’ for petitioners.The Open Tax Court has been held 32 times to examine 173 petitions from April 2008 to November 2010. Sixty or 34.7 percent of the 173 cases were accepted and 1,087 million won has been returned to citizens, as a result.


Since no additional budget was needed, there would be no financial problems in keeping the ‘Open Tax Court’ system running.Also, from the social perspective, given that current trends suggest there will be a continuous increase in public interest in taxation, the participation of citizens is also expected to continuously increase. For this reason, the ‘Open Tax Court’ may have to expand its operations in the future.The ‘Open Tax Court’ is a system that is aimed at providing remedies to citizens in a more creative and active way, moving away from the previous framework of closed examination management. The system has been benchmarked by such governmental agencies as the Prime Minister’s Office, the Tax Tribunal Office, the National Tax Service, the Customs Service Office and the Patent and Trademark Office, and local governments including the Busan Metropolitan Government. The ‘Open Tax Court’ has also been introduced to tax officers in Uzbekistan.






Department / Contact

  • International Relations Division  /  82-2-2133-5264  /  international@seoul.go.kr
  • Global Future Research Center  /  82-2-2149-1418  /  ssunha@si.re.kr

Related Film